Novartis to Cut Almost 2,000 US Jobs This Year

GENEVA (AP) - Drug maker Novartis will cut 1,960 jobs in the
United States this year in anticipation of lower sales for two of
its hypertension drugs, the Swiss company said Friday.

Basel-based pharmaceutical giant Novartis AG said the cuts will
affect 1,630 sales positions in the field and 330 posts at its U.S.
headquarters in New Jersey.

The restructuring was necessary because of the expiry of its
patent for the best-selling hypertension drug Diovan and the
failure of a clinical study into another hypertension drug,
Tekturna, Novartis said.

"We recognize that the next two years will be challenging in the
Pharmaceuticals Division and we are proactively making these
changes to further focus our pipeline on the best opportunities and
align our market position on our growth brands," the head of
Novartis' pharmaceuticals division, David Epstein, said in a
statement. "These are difficult but necessary decisions that will
free up resources to invest in the future of our business which we
view as well suited to bring new valuable therapies to patients and
payors."

Novartis said the job cuts would save $450 million a year from
2013 after an initial charge of $160 million, to be booked in the
first quarter of 2012.

Diovan contributed $1.43 billion to Novartis' net pharmaceutical
sales of $8.16 billion in the third quarter. Its patent expiry is
likely to markedly increase competition from generic products.

Meanwhile, Novartis said a reassessment of the future sales
potential of Tekturna, which is known as Rasilez outside of the
U.S., will result in an exceptional charge of $900 million in the
fourth quarter. The company said last month at it had terminated a
trial into the expanded use of Tekturna after it was found to cause
increase complications in patients already taking other common
hypertension drugs.

Two other experimental drugs will also be dropped, leading to
one-off charges of $160 million in the fourth quarter, Novartis
said.

In its statement Novartis made no mention of a recent
announcement that it was recalling several over-the-counter drugs
in the United States following reports of a possible mix-up with
powerful prescription pain medications at a Nebraska manufacturing
plant.

Novartis shares closed at 53.35 Swiss francs ($56.61) on the
Zurich exchange Thursday. The market was closed for trading Friday
morning due to an unspecified technical problem, but is expected to
open later in the day, said Stephan Meier, spokesman for SIX, the
Swiss stock exchange.